Technology | Media | Telecommunications

Saturday, March 20, 2010

The Amazon Kindle e-reader and online e-bookstore has spawned a paid e-publishing content marketplace that has grown in the past two years. But, is this truly the profitability salvation that print publishers had hoped for?

Competition from other device makers -- such as Apple -- promises to further stimulate what is already one of the most dynamic areas of the digital content ecosystem.

Sales of e-books have grown steadily since the format first appeared in the early 2000 time frame. The Association of American Publishers (AAP) estimated that U.S. net sales to its 85 member publishers totaled $169.5 million in 2009 -- up 176.5 percent from the 2008 figure of $61.3 million.

In fact, revenue for 2009 was the highest ever, and the percentage gain was the greatest since e-books started producing a profit.

"Currently, most e-book volume comes from Amazon.com's Kindle Wireless Reading Device sales," said Paul Verna, eMarketer senior analyst. "But it is unlikely that Amazon.com will be able to hold on to such a dominant market as e-book pricing becomes more competitive and more complicated."

In newspaper and magazine publishing, opportunities are less tangible than for books, and monetization models are in flux.

Several publishers are looking to experiment with paid models after ad-supported efforts have fallen short. Existing paid plans included metered access, freemiums, 100 percent subscription sites and even donations in one case.

But many studies already demonstrated that consumers are very reluctant to pay up for news content -- unless it's truly of exceptional quality.

"Consumers will resist paying for content," Mr. Verna said, "especially in cases where they feel they can find the same quality information elsewhere online for free."